Should You File Taxes on Your Smartphone?

Most of the software from the big three -- Intuit, H&R Block and TaxAct -- looks pretty much like what you'd expect if you've ever used one of those programs. But Intuit has taken one big leap, offering a program called SnapTax that let's you prepare and file your return on an Android or iPhone.

There's a pretty big catch here. SnapTax is designed for the person whose taxes are simple enough to file using the 1040EZ form. If you earned more than $80,000, derive income from anything but a W2-type job, (although interest and unemployment benefits are OK) and have dependents or own property, it's not for you. On the other hand, if you're, say, a student, with a dead simple financial picture and an addiction to your smartphone, SnapTax could be right for you.

Here's how it works. You download and install the free app. When the program launches it asks questions to find out if your taxes are simple enough for SnapTax to compute; if so, it has you create an account. After that, take out the W2 form your employer sent you, take a picture of it with your phone, and you're pretty much done. The data is "read" using optical character recognition, encrypted and uploaded to Intuit's secure servers where it is entered into an electronic version of the 1040EZ. You'll be able to review the form before filing.

It costs a total of $14.99 to file one copy to the feds and another to your state tax collection folks. So far, 315,000 copies of SnapTax have been downloaded, says Intuit spokeswoman Ashley Kirkendall.

PC Tax Prep's Big Three

TurboTax can now allows filers to import data from a PDF created by a competing tax program, and if you're a user of Mint (now owned by Intuit) any information you have on that Web site can easily be imported as well. These days, the functions offered by the online and boxed versions of TurboTax are quite similar, says Kirkendall.

H&R Block at Home comes in four flavors: Basic at $19.95 through Premium & Business at $79.95. You should note that filing a state return with the program costs more.

The company Web site has an interactive questionnaire to help you pick the version that fits your needs the best. One hybrid option, called the Best of Both, costs $79.95 and adds unlimited help via email or phone from a company professional, who will also review and correct your return.

TaxACT is the cheapest of the major offerings. It claims that its free version (again, state filing is an extra charge) is powerful enough to use on even complex returns, though one reviewer noted that the paid versions didn't do as well importing data from previous returns or investment accounts as its competitors. The premium version costs $17.95 to use on the Web, and it includes both federal and state returns.

Beware instant refunds

Getting your tax refund almost immediately sounds great. Unfortunately, it can be a high-interest loan in disguise. "So-called 'instant' refunds offered by some tax preparers are usually Refund Anticipation Loans (RALs), which often come with high fees and interest rates that cut deeply into the amount a taxpayer would receive from the IRS," according to New Jersey's Division of Consumer Affairs, which has been cracking down on the scam.

A press release from the agency notes that you can get a full refund in three weeks or less by filing electronically. Good advice.

San Francisco journalist Bill Snyder writes frequently about business and technology. He welcomes your comments and suggestions. Reach him at bill.snyder@sbcglobal.net.

Follow Bill Snyder on Twitter @BSnyderSF. Follow everything from CIO.com on Twitter @CIOonline.